Maureen Bader: Port Mann Bridge is just the latest B.C. boondoggle in the making
By Maureen Bader
Without a doubt, the Port Mann Bridge is the worst traffic choke point in the Lower Mainland. It routinely delays commuters and truckers, ultimately hurting productivity. Unfortunately for taxpayers, the solution to the problem, known as the “Port Mann Bridge project”, is already creating visions of another convention centre calamity, the most recent icon of government mismanagement.
If government were a private business, it would have been forced out of the construction game a long time ago.
The Port Mann Bridge was supposed to be a public-private partnership (P3), as was the Vancouver Convention Centre expansion. In both cases, the risk, financial or otherwise, was too great for a private sector company to take on. For Olympian reasons, the government forged ahead with the convention centre. That was a mistake.
The original budget for the convention centre, $495 million, was not based on cost, it was based on the funding available from various levels of government. Once the government had a basic design done, the cost went up, and up, and up. True, construction cost inflation was much higher than expected, but project scope changes -- $33 million to expand public amenities, redesign the roof, and put retail space on the building's exterior -- significantly increased the cost as well. Even now, the $883 million budget is not guaranteed because the tab for any additional scope changes will be picked up by the taxpayer.
The Port Mann Bridge project is already experiencing scope creep.
Originally, the government said the cost of improvements to the Port Mann would be $600 million. That ballooned to $1.5 billion in 2006 when the government announced it would twin the bridge. Now, the total cost of the project is expected to be $3.3 billion.
As we embark on what may be yet another boondoggle, we should stop for a moment and ask why almost every government subjects taxpayers to their very own fast ferry fiasco.
When the government built the Coquihalla Highway, it decided to “fast track” it to have it open for Expo 86. The original $250 million cost ballooned to almost $1 billion. The massive cost overrun resulted in an inquiry that said the government’s attitude toward the public and the legislature bordered on contempt.
Governments seem to get away with wasting tax dollars on project after project because we remember the benefits, but forget the costs. We know about the highway into the interior of the province, but forget how its massive cost overrun created massive outrage at the time and added to the provincial debt. Taxpayers now pay about $6 million dollars per day in interest on the debt our benevolent governments have built up over the years, in part by building overpriced infrastructure.
Also, conventional wisdom says government must build bridges because they are public goods; no private sector company would because they don't make money. But that isn't true.
The Guinness family financed the Lion's Gate Bridge so people could access its new real estate development on the North Shore. The bridge opened in 1938 and had a toll of 25 cents. So, it's not that the private sector won't build a bridge -- it will -- but only if there is an economic reason for it. That's the difference between government spending other people's money to build a bridge, and the private sector spending its own money to build the bridge. The difference is between politics and economics.
If a private company had even half the debacles various B.C. governments have had over the years, it would have gone bankrupt long ago. That's because governments that make mistakes just take more of other peoples' money. If the private sector is unable or unwilling to take on a project, it is a signal that the project is too risky for the taxpayer as well. Increasing the construction budget to cover off increased costs is something only a government would do -- after all, it's not their money. In the years to come, as the financing fiascos of the fast ferries, the Olympic athlete's village, the convention centre, and the Port Mann Bridge flow down the memory hole, our prosperity won't be far behind. It's time for government to get out of the infrastructure business.
Maureen Bader is the B.C. director for the Canadian Taxpayers Federation.
Mar 10, 2009 at 6:28pm
That argument doesn't really make sense. If thing can only be built when there is money to be made....then most infrastructure will never be built. I believe the Lions Gate bridge is the ONLY bridge built with private financing in Vancouver......and how many roads or highways in vancouver are built privately?......we'd all have dirt roads (but even dirt roads cost money to build!). And would anyone build the new sewage plants or our new water filtration plant? No.!...we need it, but you'll never be making money from it!
One purpose of taxation is to build infrastructure that benefits the public. Money and profit shouldn't be the only driver for infrastructure. The purpose of government is NOT to make money - it is not a corporation. It's purpose is to serve, provide for, and protect the public.
Mar 10, 2009 at 10:54pm
Maureen as a representative of the throughly discredited neocon school of thought is being deliberately disingenuous
Most of these sort of debacles seem to happen when right wing governments persuaded by enormous campaign donations give private ownership to public projects. The private owners financed as they are by NewYork hedge funds require a 15% rate of return compared to the modest 4% the public borrows at.
The projects are all built by the same private contractors usually the lowest bidder, so it is the financing issue that triples the cost of private projects.
The Port Mann project costs overruns are tiny in comparison to tens of billions in public money to be lost through the Independent Pirate Power process.
Mar 11, 2009 at 9:35am
All existing bridges to Surrey should give up a lane for bicycles and no new bridges....pretty please. Let's not do anything to encourage obese surburbanites, and their parade float SUVs, to enter our urban space. Can't they find jobs in their neighborhoods...maybe cleaning up the boat loads of fast food litter or designing shiny clothes to compliment their lack of taste in everything else?
I'm just jerkin you around Surrey....love ya...but stay the fuck on your side of the river. I'm not asking.
Ron van der Eerden
Mar 12, 2009 at 10:29am
There are different ways to finance road construction. The Lions Gate is one example but it required suburban sprawl. Nasty! Tolls are another. Fuel taxes are another. But our governments have mostly used social engineering, building roads and bridges out of general revenue. This has distorted the market, given us a huge trucking industry (free roads) and hurt railways who fund most of their own infrastructure. So governments have paid for a highly polluting industry to flourish while inhibiting a more benign one. They have distorted the development market by giving commuters free roads to travel long distances. Many of our major problems from pollution and climate change to lost farmland, poor public transit and social decay (ghettoisation) are not the result of a "bad" society. They are a direct result of governments funding roads.
If road users had to pay the true cost, estmated at $3.25 per litre in the case of a gas tax (on top of the price of fuel) many more would live close to work, take transit, walk or cycle. We'd have dense, mixed use, highly efficient neighbourhoods and superb public transit. We'd also all have a lot more money in our pockets. Instead we have government funded massive sprawl. This must stop.